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400,000 Volkswagen cars in Britain need engine mending
Volkswagen's British managing director Paul Willis has said about 400,000 Volkswagen cars in Britain will need changes to their fuel injection system.
 
He apologized before the Commons Transport select committee over the diesel emissions scandal on Monday, reported Xinhua news agency.
 
Close to 1.2 million British vehicles had been affected but the remaining two thirds would only need software altered, he said.
 
He said that recalls of British vehicles would start in the first quarter of 2016.
 
But he conceded there was "some risk" that a target of doing all the work by the end of next year would be missed.
 
Owners of these vehicles would be given a loan car during the recall process if they might feel inconvenienced by not having a vehicle, he added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

Beyond the Black Money Bill
No focus on stock markets and other money-laundering machines
 
After all the noisy assertions, only Rs4,147 crore of unaccounted wealth was declared during the special 90-day compliance window of the The Undisclosed Foreign Income and Assets (Imposition of Tax) Act, 2015 (Black Money Bill). Of this, just Rs2,488 crore will come into the government’s tax kitty. Bringing unaccounted wealth, or black money, back to India was one of the major planks on which Narendra Modi led the National Democratic Alliance (NDA) to power in 2014. But this ill-conceived attempt at mopping up black money through a draconian new law has predictably flopped, that too very badly.  
 
This can lead to two possible outcomes. A good one, where the government changes track and works at initiating meaningful action against the generation and laundering of black money. The bad option would be to act on the dire threats issued by the finance minister and his officials (after the compliance period ended) and let loose an indiscriminate reign of tax terror. This will make India an even worse place to do business and further damage the government’s credibility. 
A former income-tax officer, who has been helping the special investigation team (SIT) on black money, makes a simple point. If you want to stop the generation of black money, you have to plug all the official sources of laundering it and put it back into circulation. 
 

There is plenty of information on what the government needs to do to reduce, if not eliminate, the generation of black money. This includes some excellent issues flagged by the SIT, appointed by Supreme Court, headed by Justices MB Shah and Dr Arijit Pasayat. 
 
One of the biggest sources of laundering black money is the stock market. For several years now, Moneylife has reported the brazen manipulation of illiquid stocks and the silence of the regulator. Then, in July 2015, the third report of the SIT on black money pointed a finger directly at SEBI in a detailed section on how stocks were manipulated to misuse the exemption on long-term capital gains (LTCG) tax.
 
The SIT asked SEBI to put in place an effective monitoring system to flag unusual price movements and also share the information with the financial intelligence unit (FIU) and the central board of direct taxes (CBDT).
 
In a further criticism, the report said that merely barring entities that indulged in price manipulation is not enough of a deterrent; SEBI must inform the enforcement directorate to initiate action under the Prevention of Money Laundering Act.
 
SEBI chairman UK Sinha responded with an interview to PTI on July 2015 claiming that SEBI has strengthened its online surveillance which gives ‘100 alerts a day’ and makes it difficult for anyone to get away with manipulation. He also claimed credit for a crackdown by SEBI on such manipulation. This is interesting because, in response to a Right to Information query from Moneylife, SEBI had said that it did not have any data on alerts put out by its market surveillance systems (until the end of March 2013) and, consequently, could not give us any information on action taken on the basis of those alerts. 
 
We now know that SEBI was not only tardy about acting on the manipulation of penny stocks, but its failure to record adverse findings caused the income-tax department’s efforts against bogus LTCG claims to fail. Former revenue secretary Shaktikanta Das’s ‘secret’ letter to SEBI chief (revealed in Debashis Basu’s column in Business Standard), pointed out that the Income-Tax Act prescribes a time limit for assessment and raising tax demands and SEBI needs to act faster, and more decisively, to support the efforts of the I-T department. 
 
The finance ministry, under the United Progressive Alliance (UPA), was hardly known to encourage stringent action against market manipulation; nor did it demand accountability from the regulator. Will things be different under the NDA? We now have a proactive revenue secretary in Hashmukh Adhia and he is also believed to have the ears of the prime minister (PM). It remains to be seen if he cracks the whip and stops one segment of the stock market from being one large money-laundering machine. There are several other issues flagged by the SIT and other experts that need Mr Adhia’s immediate attention in the effort to stop the generation of black money. These are:
  1. Prevent the misuse of participatory notes (PNs) or offshore derivative instruments (ODIs) to launder black money. According to the SIT report, SEBI said that the value of ODIs issued at the end of February 2015 was a massive Rs2.7 lakh crore. 
  2. Stop the creation of ‘shell companies’ to provide accommodation entries and launder funds. The SIT asked the serious frauds office (SFO) in the ministry of company affairs (MCA) to mine the MCA21 database for information on such companies based on common names, phone numbers, addresses, directors, etc. The moot question here is whether the government will adequately empower the SFO and act on its suggestions. 
  3. The SIT recommends the creation of a central know your customer (KYC) registry to connect independent identity proofs and data available with various regulators and government agencies. This would assist in identifying multiple transactions. Another benefit would be the reduction of harassment and multiple compliances demanded from law-abiding persons.  
  4. The SIT report has a detailed discussion on cricket betting. It points out that “illegal betting leads to malpractices such as match-fixing or spot-fixing” which also cheats the bettors. The SIT cites a FICCI-KPMG report of 2013 which points out that only betting on horse racing, casinos (in some states) and lotteries conducted by state governments were legal in India. Cricket betting, which is a massive Rs3 lakh crore business, is banned. Legalising cricket betting and levying a 20% tax on it could generate revenue of around Rs12,000 crore-Rs19,000 crore, says the report. Will the NDA government have the courage to do it? Or will the cosy cabal of politicians, cutting across the political spectrum, which controls Indian cricket, ensure that this cash machine, which funds political parties, remains untouched? 
  5. The SIT has suggested a reasonable threshold, of around Rs10 lakh to Rs15 lakh, for holding cash currency. This would allow proper regulatory action across a large spectrum of dubious, cash-only activities such as drugs/narcotics deals, corruption/bribery, betting, donations to educational institutions and election funding. 
  6. Another big generator of black money is real estate which is not only in short supply but also controlled by politicians. Successive governments have studiously avoided mapping and digitising land and real estate records, registrations and stamp duty in a manner that there is complete transparency—from the process of acquiring land to sale of a built-up product. Doing this would probably end the rags-to-riches stories of a large portion of politicians who attribute their riches to real estate development. Again, will NDA bell this cat?
  7. Speaking at a Moneylife Foundation seminar in April 2015, BJP leader, Dr Subramaniam Swamy, had suggested that illicit wealth stashed in tax havens abroad by Indians should be declared as national wealth and directed to be transferred to India under the United Nations’ Convention on Corruption. This is another area that directly affects super-rich politicians and industrialists. 
In short, there is enough clarity on how black money is generated and laundered. The government could have easily used the many existing laws that cover benami transactions and money laundering and acted through its existing arms such as income-tax, enforcement and financial regulators, using information dug up by the SIT. And, yet, the NDA government created a new law that was mainly aimed at recovering wealth stashed abroad. Was it designed to avoid, block, confuse and divert (ABCD), as Mr Modi once said about the bureaucracy? We will know, soon enough. 

User

COMMENTS

Hemen Parekh

11 months ago

How to conquer Corruption ?


There is only one sure - and superfast - way to get rid of corruption
By introducing :
* NEGATIVE MOTIVATION
Putting behind bars ( - and right away ; not after 6 years ) , every corrupt fellow and
immediately confiscating his ill-gotten wealth
* POSITIVE MOTIVATION
By abolishing Personal Income Tax and introducing Amnesty Scheme , incentivize
# converting of black money into white
# acceptance of all payments thru official channels

As far as providing " Negative Motivation " is concerned , I had sent following suggestion to our Hon Prime Minister / Finance Minister / other Ministers / Secretaries etc , on 4th Nov 2015 :

# INTERNET OF THINGS ( IoT )

As each currency note of Rs 500 / 1000 , is getting printed , embed it with microscopic
RFID chips ( with this , current cost of a RFID chip will fall from 50 paise to 5 paise )

Besides communicating with each other , these chips will also transmit their existence
location , through internet , to cloud-based servers of Income Tax Department

This will form a " NETWORK OF CURRENCY NOTES ( NoC ) "

You may like to call this Internet of Currency ( IoC ) , a sub-set of IoT !



# IP ADDRESS SYSTEM ( IP V 6.0 )

Each Rs 500 / 1000 currency note must be assigned ( at the time of printing ) , its own
unique Internet Address , using IP V 6.0

This IP address should be linked with the unique Serial Number printed on each note.

Since IP V 6.0 , will be capable of assigning " 2 * 10 to the power of 128 ", no of IP
addresses , there is no danger of running out of addresses , even if we decide to extend
this idea to Rs 100 currency notes !


Here are the most important BYE - PRODUCTs :

* No more possibility of fake / forged / counterfeit , currency notes

* No thief would ever want to steal such currency notes which continuously announce their
location

* No one would want to make any " Cash Deal " . All payments will become official only !

* Plastic currency notes will last 10 times longer !



This reform will enable the Central Government / Income Tax Department , to :


* Continuously trace the movement of each of these higher denomination currency notes


* Instantly locate any place ( using Google Map based GPS ) , where there is an
accumulation of more than Rs 1 Crore worth of currency notes

Such accumulation will be made to appear as a TAG CLOUD on the web site of IT Dept,
like thousands of balloons floating on a map of India , capable of being drilled down to
within 1 Sq Meter ! Of course , visible only to IT officers ; not to general public !

On each balloon , will appear a number announcing , " Amount of Cash here - Rs " !

This will vastly simplify the task of Anti Corruption Dept / Enforcement Dept etc
Of course , RBI will need to allow 6 month's time to the owners of current paper currency notes of Rs 500 / 1000 , to get these exchanged with new plastic notes before withdrawal of the old notes from circulation

Implementation of this suggestion , does NOT require passing of any BILL in Lok Sabha or being held to ransom in Rajya Sabha !

And it can be implemented in India , within ONE YEAR

But if Chinese President Xi Jinping comes to know about the practicality of this suggestion , he might implement it in 6 months !

How come ?

Simple ! Xi Jinping has the political will ! And no historical baggage !

-------------------------------------------------------------------------------------------------------

hemen parekh

24 Dec 2015

( Also read blog " Create Wealth to Create Jobs " at : http://www.hemenparekh.in > Blogs )

Hemen Parekh

11 months ago

How to conquer Corruption ?


There is only one sure - and superfast - way to get rid of corruption
By introducing :
* NEGATIVE MOTIVATION
Putting behind bars ( - and right away ; not after 6 years ) , every corrupt fellow and
immediately confiscating his ill-gotten wealth
* POSITIVE MOTIVATION
By abolishing Personal Income Tax and introducing Amnesty Scheme , incentivize
# converting of black money into white
# acceptance of all payments thru official channels

As far as providing " Negative Motivation " is concerned , I had sent following suggestion to our Hon Prime Minister / Finance Minister / other Ministers / Secretaries etc , on 4th Nov 2015 :

# INTERNET OF THINGS ( IoT )

As each currency note of Rs 500 / 1000 , is getting printed , embed it with microscopic
RFID chips ( with this , current cost of a RFID chip will fall from 50 paise to 5 paise )

Besides communicating with each other , these chips will also transmit their existence
location , through internet , to cloud-based servers of Income Tax Department

This will form a " NETWORK OF CURRENCY NOTES ( NoC ) "

You may like to call this Internet of Currency ( IoC ) , a sub-set of IoT !



# IP ADDRESS SYSTEM ( IP V 6.0 )

Each Rs 500 / 1000 currency note must be assigned ( at the time of printing ) , its own
unique Internet Address , using IP V 6.0

This IP address should be linked with the unique Serial Number printed on each note.

Since IP V 6.0 , will be capable of assigning " 2 * 10 to the power of 128 ", no of IP
addresses , there is no danger of running out of addresses , even if we decide to extend
this idea to Rs 100 currency notes !


Here are the most important BYE - PRODUCTs :

* No more possibility of fake / forged / counterfeit , currency notes

* No thief would ever want to steal such currency notes which continuously announce their
location

* No one would want to make any " Cash Deal " . All payments will become official only !

* Plastic currency notes will last 10 times longer !



This reform will enable the Central Government / Income Tax Department , to :


* Continuously trace the movement of each of these higher denomination currency notes


* Instantly locate any place ( using Google Map based GPS ) , where there is an
accumulation of more than Rs 1 Crore worth of currency notes

Such accumulation will be made to appear as a TAG CLOUD on the web site of IT Dept,
like thousands of balloons floating on a map of India , capable of being drilled down to
within 1 Sq Meter ! Of course , visible only to IT officers ; not to general public !

On each balloon , will appear a number announcing , " Amount of Cash here - Rs " !

This will vastly simplify the task of Anti Corruption Dept / Enforcement Dept etc
Of course , RBI will need to allow 6 month's time to the owners of current paper currency notes of Rs 500 / 1000 , to get these exchanged with new plastic notes before withdrawal of the old notes from circulation

Implementation of this suggestion , does NOT require passing of any BILL in Lok Sabha or being held to ransom in Rajya Sabha !

And it can be implemented in India , within ONE YEAR

But if Chinese President Xi Jinping comes to know about the practicality of this suggestion , he might implement it in 6 months !

How come ?

Simple ! Xi Jinping has the political will ! And no historical baggage !

-------------------------------------------------------------------------------------------------------

hemen parekh

24 Dec 2015

( Also read blog " Create Wealth to Create Jobs " at : http://www.hemenparekh.in > Blogs )

REPLY

Meenal Mamdani

In Reply to Hemen Parekh 11 months ago

Ingenious but don't know if it is doable.

mohammed faisal

1 year ago

one action can boost direct collection if govt adopt following process in land deal & real estate deal

1. once deal complete govt or any person on indian can bid within two month of higer price as disclose in agreement and get this property,

seller have no right to get excess amount which come from bid this amount excess directly credit in govt unique collection account not only get excess amount also to stop black money route to nation and create wealth for and boost direct tax collection and also to force person indirectly to deal with market price and paid complete tax on long term capital gain also stop black money route which in major part on in indian system,

SuchindranathAiyerS

1 year ago

In a country that studiously avoids all forms of accountability, let alone prosecution and punishment, in a collusion of the Neta-Babu-Cop-Milard-Crony Kleptocracy, what meaning do laws have?

manoharlalsharma

1 year ago

Even a small business men knowing all this and some of complaining also but no one ready to Check or investigate without intervene of HC/SC no COMMON citizen have money to serve to-days ADVOCATES.

Gopalakrishnan T V

1 year ago

The article has brought out where the problems lie in respect of generation of black money. The black money bill aimed at bringing back black mnoney slashed abroad has not served the purpose. The declared amunt is a pittance. Still something is better than nothing.
The generation of black money needs to be totally plugged for which the enforcement authorities have to concentrate on the following areas involving professionals from different fields.One way of obtaining information is to have a channel opened for the people to freely report where they come across black money deals giving some evidences or some tarce of it.
The areas where vigilance is required to prevent black money generation and money laundering are as under.
1) Allowing corporates to float any number of subsidiaries without any valid reason. These subsidiaries enable black money holders to have some avenues of investments and both the holding Companies and subsidiary Companies declare losses routinely without being seriuosly probed by any authorities. SEBI can be really vigilant and alert in preventing such companies.
2) Imports and Exports: Bank of Baroda Ashok nagar branch is a live example as to how Companies are alloweed to open accounts freely without adherence to KYC norms or any other regulatory Prescriptions. This must have been going on in several branches in a canmoufalged manner as the branch Inspectins are not carried out by the Regulator these days.Liberalisation of regulation is essential but it should not lead to loot or indiscipline in conducting the affairs. There should be sufficient Checks and balances.
3) Real estae : Black money is easy to be stacked in eal estate. The unsold flats in various cities isa live example of the volume of black money held in real estates. RBI policy rate cut cannot have any serious impact in the real estate movements as black money holders and banks which have financed these real estates are not affected by such policy measures.3
3) Purchase of farm lands and forming farm clubs in and around major cities have become a fashion these days and both black money and white money flow to these farm clubs. White money gets converted into black money and banks are also involved. Thefact that amounts are paid through banks do not have the meaning that the money is white. Banks deal in black money and no suspicion arises.
4) Purchase of Gold, Jewellery and other high price CommodiiesThe dealers invariably insist on black money and they never entertain cheque or card payments. The IT authorities can visit any bullion merchants incognito and experience themselves that withou cash no transactions can be carried out.
5) Dealers in furniture, furnishing houses spread over entire country. They always insist on cash and they seldom take cheque or cards.
The list goes on and if the authorities can really be after them, the finacial system in the country can be very clean and the revenues of the Government can get augmented several times. The informal economy which is large and bigger than the formal economy needs to be fixed and earlier it is done the better.

Amit Anam

1 year ago

Stop printing 500 & 1000 rupee currency notes.

Meenal Mamdani

1 year ago

Since every decision is taken by the PM and communicated through PMO, it would be helpful for Modi to spend some time in Delhi. At present he is either campaigning wherever elections are being held in India or he is visiting a foreign country asking for FDI and hobnobbing with NRIs and celebrities.

Amit Kamkhalia

1 year ago

Some more Laundering avenues r enjoying bliss in India ,why are we not taking action on Real Estate which officially accepts and processes Black Money ,real estate agents enjoy virtually TDS free income ,Black money in movies is no new thing ,similarly all this Baba and Messengers of gods r heavens for black money , most of this Babas r worth in excess of 2000 crores, where does this money come from , also we really need to shut down official money laundering routes like so called tax heavens which r merely used for money routing with no value added contribution of their own .

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